It is not everyday that shortsellers get the chance to be proud of their returns. Many recent shorts have experienced much headache before before they the trades turned profitable – this is the case for one of France’s most shorted names Alcatel Lucent SA (ADR) (NYSE:ALU) (EPA:ALU). Alcatel Lucent provides voice and data services – the stock has suffered after a bad run of earnings.
Shorts in Alcatel Lucent finally turn a profit
Some big names were shorting Alcatel Lucent SA (ADR) (NYSE:ALU) (EPA:ALU) and remained unfazed by the consistent rise in stock over the past year. ALU gained 225% in 2013, which propelled its stock price from $1.3 to above $4.5. We have reported on Alcatel Lucent’s yearlong rally before, which brought millions in losses to the hedge funds betting against the company. Alcatel Lucent has hit a rough patch this year, shares of the company are down 20% to date, rewarding those who have been patient in their pessimism.
As of May’s end, John Burbank’s Passport Capital and Susquehanna International Holdings are among those who have shorts in the company. According to data from Markit, 12% of Alcatel Lucent SA (ADR) (NYSE:ALU) (EPA:ALU)’s shares are held in short positions. Most analysts have neutral rating on the stock. The company has adopted an aggressive cost-cutting plan to control its losses.
Shortsellers see some gains in April-May
Reuters reported that largest short positions in Europe became green for shortsellers as stocks stumbled in the April to May period. According to Markit’s report, the most shorted stocks lagged the market by 8%.
Another heavily shorted name, Heidelberger Druckmaschinen AG (ETR:HDD) (FRA:HDD) has 10% of its shares out on loan, according to Markit. The German company provides technology to the printing industry and has suffered a fall in April-May period. However the stock is back up once again. Valinor Management, Marble Arch Investments and Marshall Wace have bet against Heidelberger Druckmaschinen.
Aixtron becomes volatile
AIXTRON SE (NASDAQ:AIXG) (ETR:AIXA) (FRA:AIXA), a German company that makes silicon or organic semiconductor materials, also fell in the last couple months. The stock slumped 15% in the last three months. Those who have benefitted from Aixtron’s recent dip included, Discovery Capital, Marshall Wace and AQR Capital. The stock was previously a short of Maverick Capital and Pennant Capital, as well.
Royal Imtech continues to fall
Netherlands-based Royal Imtech NV (AMS:IM) (OTCMKTS:IMTEF), an engineering services company, continues to be a rewarding short this year as well. The Dutch company bottomed in mid-2013 and then once again in April this year. The stock is down 50% for the year, after it disclosed that it will be spinning off its ICT division. The company has been under pressure from writedowns and losses.
Marshall Wace, Lansdowne Partners and Capeview Capital have the largest bets against the company. Total short interest is above 8%. Dan Loeb’s Third Point had closed its short in Royal Imtech with a profit in 2013.
ThromboGenics NV (EBR:THR), a biopharmaceutical company is among the most participated short positions in Belgium. Perceptive Advisors, Adage Capital and Millennium Management have short bets against the company which have been very profitable. Shares of the company have fallen 13% this year. Thrombogenics was also featured in the best-performing short positions of 2013.
Aggreko down 11% YTD
Shorts in London-based Aggreko plc (LON:AGK) (OTCMKTS:ARGKD) are also being rewarded this year. The company provides power and temperature solutions and its shares are down nearly 11% for the year. Lansdowne, Odey and Eton Park have been betting against Aggreko. We have already mentioned Ashmore Group plc (LON:ASHM), an investment manager and J Sainsbury plc (LON:SBRY) (OTCMKTS:JSAIY) among the profitable short bets of this year, both stocks are heavily shorted in the U.K.